If you’re like a lot of people right now, you’re probably very interested in what’s going on with the housing market and you probably have a lot of questions.
Whether you’re a current homeowner or a potential homeowner, there are two questions you’ll have in common- why are prices going up, and what will happen with future prices?
There is a lot of speculation saying that an improved economy is the driving force behind the rising house prices. Unfortunately, there is a lot of data that also says this is simply not the case. An example of some of that data is the unemployment rate. A sure sign of an improving economy is a shrinking unemployment rate, but we have yet to see that.
So what is the real cause of this price spike? It goes back to the basic economic principle of supply and demand.
The market crash of 2008 brought home building to a screeching halt. On top of that, investment groups came into the heaviest hit neighborhoods and bought up thousands of homes with the intention of renting them out for many years. The combination of these two events has dramatically reduced the availability or “supply” of homes.
Now we’re seeing an increased “demand” as people start looking for homes in a market with low supply. This quickly drives prices up.
With higher prices, a lot of people would like to know what will happen next. We would be lying if we said we weren’t just as interested in knowing. Unfortunately, we can’t say for sure- even the analysts are divided.
We recommend you start looking into a refinance or new home purchase now, because this could very well be the end of the record breaking low interest rates we’ve been seeing for over a year.
Creekside Mortgage, Inc is well equipped to handle all your mortgage questions. Give us a call today at 800.920.5420.